(Yicai Global) Jan. 29 -- China National Heavy Duty Truck Group, or Sinotruk, will institute market-oriented reforms, streamline departments, and lay off an estimated 11,000 redundant employees.

Chairman Tan Xuguang proposed the reforms in a speech yesterday to tackle the problems besetting the creaking state-backed heavy truck maker.

Sinotruk's organization and management are in chaos and it hires too many employees but dismisses none, Tan believes. He proposes slashing both management, departments and workforce.

The firm, which is based in Jinan, capital of China's eastern Shandong province, will build comprehensive channels for advancement and award jobs to the deserving through competition between staffers.

It will also facilitate communication between various talent teams -- including management, experts and technicians -- and establish a market-oriented competition mechanism where position and salary depend on performance, with those not up to snuff let go.

Tan suggested dismissing 11,000 outsourced workers, introducing comprehensive key performance indicators and quality assessments of all executives, and setting up a regular mechanism of survival of the fittest, and firing inept senior executives, management and common staff every year to steadily refine the overall quality of the workforce.

Sinotruk had a total of 42,151 employees as of the end of last year, statistics show.

In addition to culling workers, the firm will further zoom in on its main lines, eliminate zombie units, pull out of companies irrelevant to its primary business, and quit real estate, property management, hospitals and other non-core activities.

Tan's reform goal is to produce 200,000 heavy trucks and 200,000 light trucks and achieve a profit of CNY10 billion (USD1.5 billion).

China National Heavy Duty Truck's predecessor Jinan Automobile Works was founded in 1956 and was restructured into Sinotruk in 2001.

The group is China's largest heavy-duty vehicle producer and has two firms listed, one on the Hong Kong Stock Exchange and the other in China's A-share boards of domestic stocks.

Editor: Ben Armour